No matter where you are driving in Canada, the law requires that every driver has car insurance. Automobile insurance is mandatory in all provinces and territories. Your vehicle must be covered under an insurance policy with a minimum set coverage, If you are caught driving without insurance you can be fined, have your driver’s license suspended, and even have your vehicle towed and impounded. Fines can range from $5000 to $50,000.

If you are in an accident while driving without insurance, you could face a number of consequences that include:

• If another person is injured or there is a loss of life and you are at fault, you could be liable for all vehicle damages, medical costs, and other losses

• You will not be entitled to receive compensation for your own injuries and damage to your vehicle, as well as other losses such as income.

• You may be prohibited from filing a claim against another driver if they are at fault.

If convicted of driving without insurance, your insurance company could label you as a “high risk” driver and increase your premiums. They could also cancel your policy.

There are a number of factors that determine the amount you will pay for insurance. They include:

New Driver: New drivers do not have a driving history so companies normally rate them as “high risk.” Insurance premiums will likely be expensive until you have established a good driving record.

Driving Record: Your driving record will affect your insurance premium. Insurance companies look at how long you have been driving and the number of convictions you have acquired. Convictions can include speeding tickets, car accidents, and traffic violations such as running a red light. If you have a clean driving record, your premiums should be low.

Type of Car: The type of car you drive will affect your premium. Vehicles are rated according to the make (truck, SUV, expensive sports car). Companies look at the risk of theft, vehicle collision history, and injuries associated with the type of car. The age of the car and mileage is also a factor when determining rates

Common insurance discounts include: age discount, multi-vehicle discount, multi-line discount (insuring your home and auto with the same insurer) anti-theft device discount, low mileage discount, and auto club membership discount.

There are a number of features that can be included in an insurance policy. The two most important forms of coverage are:

Collision Coverage: This coverage compensates for damage to your vehicle as a result of a collision with another vehicle or object.

Third-Party Liability: This insurance covers you if you are held legally liable when your vehicle injures someone or damages their property. Liability is mandatory in all provinces and territories in Canada.

In some provinces there are limitations on how much compensation you can receive. For instance, in Prince Edward Island, Nova Scotia, and New Brunswick, the maximum amount one can claim for pain and suffering is $2,500. This capped amount is separate from what you receive in insurance benefits. Pain and suffering claims are separate from claims of property damage, medical expenses, or loss of employment income.

There are a number of places where you can purchase car insurance. You can buy it from an insurance broker, insurance agent, or direct writer. Insurance brokers sell policies for a variety of insurance companies. Insurance agents represent only one insurance company. Direct writers are insurance companies that sell their own insurance directly to the customer. The insurance company is responsible for providing the coverage that is noted on a driver’s Certificate of Automobile Insurance. You are only covered for what is listed on the certificate. Prices vary among companies so make sure you shop around.

Because car insurance is mandatory in Canada, you should always have insurance before you drive. The costs getting caught without it are much greater than the actual cost of acquiring insurance.